Expect to keep hearing more talk about health care cost cutting, despite charts like this . It’s an idee fixe of the Wall Street/Washington corridor, and will only be implemented more vigorously over time. So perhaps we should take stock of a few cost cutting initiatives. Medicare Part D, it seems, is coming way under its projected budget. But maybe that’s because of ”a sharp fall in the number of breakthrough drugs,” a sign that innovation in pharma is stalling. Cost cutting triumph, or logical outgrowth of a system that fails to reward actual contributions to health ?
There’s also been a lot of pressure on skilled nursing facilities to hold the line on costs. What are we getting in return? Here’s a summary from OIG :
I’m sure the health care cost cutters will use this evidence to demand the SNFs be paid even less–rather than, say, investing real funding in proper training and pay in this vital service sector. At some point, though, costs get cut so much that Medicaid will become little more than a meaningless plastic card, and “SNF” will stand for “Scarce Nursing Forever.”
This post first appeared on HealthLawProf Blog .
Paper Warns Against ‘Nonexistent Safety Data’ and Charts a Course for FDA Oversight
Seton Hall Law Professor Jordan Paradise has released her newest paper, “No Sisyphean Task: How the FDA can Regulate Electronic Cigarettes,” scheduled to be published this Spring in Volume 13 of the Yale Journal of Health Policy, Law, and Ethics.
A report issued in February 2013 by the Centers for Disease Control and Prevention (CDC) estimates that as of 2011 “about one in five U.S. adult cigarette smokers have tried an electronic cigarette,” nearly twice as many as in 2010. CDC’s director, Tom Frieden, MD, MPH, remarked that “E-cigarette use is growing rapidly” but also noted that “there is still a lot we don’t know about these products….”
In “No Sisyphean Task: How the FDA can Regulate Electronic Cigarettes,” Professor Paradise investigates the rise of the e-cigarette phenomenon in the wake of the recently enacted Family Smoking Prevention and Tobacco Control Act of 2009 (TCA), the tumultuous history of attempts at tobacco regulation through Congress, the FDA and the courts and suggests a feasible approach to strengthening regulation of e-cigarettes under the existing statutory framework. These measures would facilitate oversight and the compilation of a safety profile for e-cigarettes; such a profile is conspicuously absent at present.
In the paper, Professor Paradise explains that because e-cigarettes contain nicotine, and are “derived from tobacco,” they have been found to fall under the designation of “tobacco products” under the TCA. Any product designated a Tobacco Product may not be considered a drug or medical device for FDA oversight purposes. Although e-cigarettes have been found to be a tobacco product, they are neither “cigarettes” nor “smokeless tobacco” under the statutory definitions. This leaves their regulation unclear as neither drug-devices absent blatant health claims (which would subject them to rigorous preapproval clinical trials) nor cigarettes (subjecting them to flavor additive bans, advertising restrictions, and graphic warnings). These perceived statutory gaps have thus far allowed the manufacturers, marketers and distributors of e-cigarettes to sell their product to the public, largely unregulated and unsupervised.
Professor Paradise notes, “E-cigarettes are one of those products for which the technology has seemingly outpaced the law. In fact, most of the core provisions of the TCA aimed at restricting youth access to smoking apply only to cigarettes and smokeless tobacco. But there is sufficient foundation under the TCA for oversight of e-cigarettes, and that oversight can be used to inform consumers of the potential risks to health as well as any benefits.” She continued, “Although there seems to be a great many people who have benefitted from e-cigarettes to quit or drastically reduce their smoking, there is currently a dearth scientific testing, comparative data, manufacturing and quality controls, limits on nicotine levels, product standards, or labeling requirements. This results in vials of the addictive drug nicotine being distributed for public consumption unchecked. We don’t necessarily know what’s in e-cigarettes, we don’t know how much, nor do we know what e-cigarettes will ultimately do, health wise, to those who use them or those who are exposed to them second hand.”
As an example of potential for oversight of e-cigarettes under the existing statutory framework, Professor Paradise points out that the statute provides for heightened requirements for what are known as “modified risk tobacco products,” defined as “any tobacco product that is sold or distributed for use to reduce the harm or the risk of tobacco-related disease associated with commercially marketed tobacco products.” The FDA has clarified the definition to say that what constitutes a “modified risk tobacco product” may be found through a product’s label, and it’s advertisingeither explicit or implicit and through any type of media. Products which meet this definition are subject to satisfying the scientific data and comparative study requirements set out by the FDA.
In addition, Professor Paradise notes that “products which make ‘therapeutic claims,’ such as signaling that a product is intended for use as an aid in smoking cessation, reduction, or as a healthy alternative to smoking, will trigger the drug or medical device provisions under the Food Drug and Cosmetics Act as a threshold matterbringing with it, again, the need for scientific data and comparative studies. The intent in ‘Intended use’ may be determined through explicit claims or ‘expressions’ by the original manufacturer or subsequent marketer or affiliates, or, according to the FDA, ‘be shown by the circumstances surrounding the distribution of the article.’”
A good look at the advertising for e-cigarettes and the circumstances surrounding their distribution is compelling, she said.”
o Product standards
o Good manufacturing practices and quality control mechanisms
o Uniform labeling and listing of ingredients on the label
o Prominent and uniform display of nicotine levels
The paper, “No Sisyphean Task: How the FDA can Regulate Electronic Cigarettes,” may be found here on SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2118802;
Contact info may be found here .
The Seton Hall Law Center for Health & Pharmaceutical Law & Policy advances scholarship and recommendations for policy on the varied and complex issues that emerge within pharmaceutical and health law. Additionally, the Center is a leader in providing compliance training on the wide-ranging state, national and international mandates that apply to the safety, promotion and sale of drugs and devices. Seton Hall University School of Law, New Jersey’s only private law school and a leading law school in the New York metropolitan area, is dedicated to preparing students for the practice of law through excellence in scholarship and teaching with a strong focus on experiential learning. Founded in 1951, Seton Hall Law School is located in Newark and offers both day and evening degree programs. For more information visit law.shu.edu .
Research Fellow & Lecturer in Law Tara Ragone appeared in Modern Healthcare on the potential impact of a recent U.S. Supreme Court decision which found a hospital not exempt from antitrust scrutiny, despite its claim to be protected from such through “state action immunity doctrine,” which, according to Modern Healthcare, “gives states wide latitude to regulate competition.”
The Court’s decision was unanimous, citing the fact that although the hospital system in question, Phoebe Putney Health System, “operates public hospitals under a $1-a-year lease from the Albany-Dougherty Hospital Authority,” it did not dispute that its latest hospital acquisition would give it “control of 86% of a six county market after the sale.” The Court, according to Modern Healthcare, ruled that Phoebe Putney’s financial relationship with the state was not sufficient to render its state action immunity defense tenable, and that “states must expressly grant antitrust immunity to local entities.”
The Modern Healthcare article notes, however, that the decision may also have impact on Medicaid ACOs under the ACA.
Modern Healthcare writes:And it also could affect Medicaid ACOs. “The state action doctrine has been expanded, expanded, expanded to essentially immunize them,” [Matthew] Cantor said. “The Supreme Court is going to look a bit wary about stark anti-competitive behavior.” But Tara Adams Ragone, a research fellow and lecturer at Seton Hall University School of Law who has written about how to structure Medicaid ACOs to avoid antitrust scrutiny, noted that the laws in New Jersey, New York, Oregon and Washington do state that they intend to authorize anti-competitive behavior. “It doesn’t change things from my analysis,” she said about the Phoebe Putney decision. Yet she added that states may have to review statutes that don’t contain that explicit language. The Phoebe Putney decision also doesn’t address the second prong of the state action doctrine, which requires states to actively oversee the anti-competitive behavior. “That’s where there’s a lot of work to be done,” she said. Ragone and Cantor pointed out that it’s still unclear whether the FTC and U.S. Justice Department even intend to challenge ACOs as anti-competitive. A classic antitrust case involves entities colluding to fix pricesbut the whole goal of an ACO is to reduce costs.
Read the full Modern Healthcare article, “ Phoebe Putney dealt legal blow by Supreme Court .”
Professor Jacobi writes:GOVERNOR CHRISTIE’S decision to expand Medicaid coverage to more residents will improve the health of many low-income New Jerseyans, and save the lives of some. In addition, the expansion dovetails with other reform efforts in the state, furthering implementation of innovative programs for the poor and vulnerable. The governor’s announcement is great news for low-income individuals. The Rutgers Center for State Health Policy estimates that the expansion will lead to an enrollment increase of about 234,000 in NJ FamilyCare, which combines New Jersey’s Medicaid and Children’s Health Insurance Program. The expansion addresses gaps in the current Medicaid system, under which many poor people were ineligible even if they had absolutely no income or assets. The expansion will plug those gaps, allowing people to enroll so long as they are lawful residents with an income of no more than about $15,414 per year, which is about the gross income of a full-time minimum wage worker. Health insurance coverage is important to personal health, and it is simply not true that all Americans have meaningful access to health care. As the Institute of Medicine of the National Academy of Sciences has found, people who have health insurance including Medicaid have better access to a regular source of health care. Those with no coverage, in contrast, are more likely to do without medically necessary care, particularly for chronic conditions, and to not fill prescriptions due to cost. As a consequence, the uninsured are more likely to be in “fair” or “poor” health and to die before their time. Medicaid expansion will keep people healthy and even save lives.
Read the full feature, “ How Medicaid expansion will help New Jerseyans ”
This past September, the Food and Drug Administration (FDA) issued a Warning Letter against L’Oreal, the world’s largest cosmetics company. The FDA cited claims gathered online from a subsidiary of L’Oreal, Lancôme, about its expensive Genifique, Absolue, and Renergie anti-aging creams and serums. Claims such as “[U]nique R.A.R.E. oligopeptide helps to re-bundle collagen” and “[B]oosts the activity of genes and stimulates the production of youth proteins” were deemed “intended to affect the structure or any function of the body,” thus rendering the claims to be drug-like under section 201(g)(1)(c) of the FDCA. Lancôme could either submit their cosmetics to the rigorous New Drug Approval process, in which safety and efficacy would be tested, or discontinue making such claims. Lancôme chose the latter.
Although the FDA possesses the authority to regulate cosmetics companies, traditionally the agency has not enforced provisions of the FDCA against big name cosmetics corporations. However, Lancôme has not been the only major cosmetics company to recently receive a Warning Letter for making drug-like claims. In October of 2012, the FDA sent a Warning Letter to Avon citing claims from their Anew product line. The drug-like claims included, “The at-home answer to wrinkle filling injections. Start rebuilding collagen in just 48 hours;” “[W]rinkles are a result of micro-injuries to the skin, so AVON studied how skin heals… ANEW’s Activinol Technology helps reactivate skin’s repair process to recreate fresh skin & help dramatically reverse visible wrinkles;” and, “In just 3 days, see tighter, firmer, more lifted skin.” As with Lancôme’s products, the FDA concluded that these products “are not generally recognized among qualified experts as safe and effective for the above referenced uses.”
The ultimate impact of an FDA Warning Letter in terms of litigation remains unclear, but the legal industry has taken notice. Attorneys at Venable LLP point out in their analysis of the FDA’s Warning Letter to Lancôme, “[F]ederal action has been shown to encourage consumer class action lawsuits.” Attorneys at Shook Hardy & Bacon LLP note, “Plaintiffs will allege that consumers were defrauded into purchasing the product because of illegal marketing claims and trumpet those same FDA warning letters as proof that the marketing claims were deceptive under state consumer fraud statutes.”
Those predictions turned out to be true. Both Avon and L’Oreal and subsidiary Lancôme have been named defendants in multiple proposed class action suits for defrauding consumers. For cases naming L’Oreal and Lancôme as defendants, see Nino v. L’Oreal USA Inc., Case No. 1:12-cv-12362 (S.D. Fl.), Schwartz v. L’Oreal USA, Inc., Case No. 2:12-cv-5557 (N.D. Cal.), and Kallen v. L’Oreal USA, Inc., Case No. 12-9479 (C.D. Cal.). For cases naming Avon as defendants, see Trujillo v. Avon Products, Inc., Case No. 12-9084, (C.D. Cal), Quinta v. Avon Products Inc., Case No. CV12-09629 (C.D. Cal.).
Attorneys at Morelli Ratner PC, who took part in filing Nino v. L’Oreal USA, Inc., write on their website: “The complaint alleges that the Defendants have advertised their “anti-aging” creams as having been scientifically tested, making claims and promising results to consumers that the Defendants know to be unfounded. Earlier this month, the Food and Drug Administration sent Lancôme a formal warning letter about the misleading advertising. The complaint alleges that L’Oreal has made millions of dollars by knowlingly [sic] and willfully misleading consumers.” The complaint addresses that the lawsuit seeks restitution and disgorgement of profits, along with “benefits and other compensation obtained by Defendants from their wrongful conduct.”
All of the complaints for the proposed class actions cite to the Warning Letters issued against the companies. The class actions against L’Oreal and Lancôme are to be centralized in the New Jersey District Court in the Newark Office with presiding Judge William J. Martini. In re L’Oreal Wrinkle Cream Mktg. & Sales Practices Litig., 2012 U.S. Dist. LEXIS 177694 (J.P.M.L. Dec. 12, 2012). With the potential rise in Warning Letters used in consumer fraud litigation against cosmetics companies, cosmetic companies, as Shook Hardy & Bacon LLP write, can no longer afford “to take a sit-back-and-wait approach.” It would seem that big name cosmetic companies have been put on notice: complying with FDA cosmetics regulations is now necessary for those who wish to maintain good public standing and to avoid costly litigation.
As health providers and patients use more technology, new ways of addressing health care disparities are emerging. In 2009 Congress passed important federal legislation that addresses the digital infrastructure for medical care, the Health Information Technology for Economic and Clinical Health Act (HITECH). Recently in 2010, Congress passed the Patient Protection and Affordable Care Act (PPACA), which reduced barriers to health information technology (HIT). In line with the technological spirit of both laws, this blog post focuses on online social networking as a digital health care solution for elderly Hispanics who face disparities in the care that they receive.
Hispanics in the United States are twice as likely as non-Hispanics to lack a regular primary care physician (PCP). Those Hispanics that do not have a PCP suffer because they tend to experience disparities in health care when compared to other patient populations. Real-time health care-focused social networking sites (SNSs) or applications within an established SNS can provide beneficial health care solutions for vulnerable patient populations such as elderly Hispanics. One-way in which a SNS can benefit elderly Hispanics and reduce their health care disparities is by supporting the Patient-Centered Medical Home (PCMH) with digital applications. In fact, if real-time social networking transpired among 1) patients, 2) patients and their health care providers, and 3) between health care providers, elderly Hispanics could potentially receive better care.
As the role of HIT increases, it has led to a growing interest in understanding the potential role of HIT in “addressing healthcare disparities among racial and ethnic minority populations.” In order to properly evaluate the potential of HIT to address health care disparities, “adoption and utilization barriers must be understood.” Because this blog post is concerned with social networking sites, the discussion here will focus on social media and its emergence as “a potent resource among healthcare consumers.” Some studies have shown that “social media utilization patterns by race suggest potential opportunities to help address healthcare disparities via” increased communication between patients and physicians.
Social media has begun to infiltrate the health care system in several ways. First, entrepreneurs who understand “health care trends and consumer demands are leading creative business startups that are developing health-oriented social networks, health content aggregators, medical and wellness applications, and tools to enable health-related vertical searches (searches focused on a specific content area).” There are a growing number of condition-specific communities such as patientslikeme , QuitNet , and CureTogether .
Although there are many benefits to HIT, there are also barriers that prevent physicians from adopting HIT. One major benefit stemming from HIT is that it can lead to positive communication in “which providers share thoughts, opinions, and information by speech, in writing, or through peer professional or social networks [which have] been shown to be associated with provider health IT adoption.” One major issue is the inability of electronic health records (EHRs) and HIT systems to communicate with each other, the impact of HIT on clinical workflows, and the absence of technical assistance for office staff and physicians. Additional barriers from the patient perspective will exist if a patient does not perceive a benefit to be gained from using technology; in fact, without a perceived benefit they are highly unlikely to use it. There is also the perception that patients might be too busy to incorporate HIT into their busy everyday lives. Also there may be “poor computer knowledge, literacy, and skills ” prevalent among target populations which could benefit from HIT. Additionally, “lack of cultural relevance as well as privacy and trust concerns all have been reported as barriers to the use of [consumer health informatics] tools and applications.” In framing technological health care solutions for a minority population such as Hispanics, it is important to consider cultural issues in any implementation because cultural issues could deter use by a given patient population.
There are several proposed ways in which HIT can reduce health care disparities. For example, if clear and accurate patient information were to be presented to a physician in an electronic setting it could lead to the promotion of high-quality personalized care and reducing select health care disparities. Additionally, EHRs could provide the physicians that serve elderly Hispanics more accurate information and help them make better treatment decisions. The largest benefit would be the ability to connect “physicians with other [physicians or patients]…[and also] tools such as e-mail, e-consultation, e-prescribing, [which could] enable providers to connect with other healthcare professionals” in a more fluid manner.
It is important that the above mentioned benefits are implemented in communities where there are underserved Hispanics or other vulnerable patient populations. It is urgent that those with the highest health care disparities benefit from such technologies because historically their needs have not been met. Scholars have already noted that “telemedicine, remote monitors and sensors, patient e-mail, and increasingly the Internet and social media, connect providers and healthcare systems to patients and caregivers.” The idea is that greater communication can reduce health care disparities. When dealing with a historically vulnerable patient population such as elderly Hispanics who face various types of social issues, I believe that easier access to their health providers can make a big difference in improving their health care outcomes.
An HIT tool that connects providers with patients could reduce health care disparities by “enabling increased monitoring of important clinical parameters” in a way that is not currently taken advantage of for minority patients. Increased communication will allow physicians to stay in contact and monitor their sickliest patients through enhanced doctor-patient communication. As technology and health care merge, it is vital that vulnerable patient populations, such as elderly Hispanics, are identified so that they can be included in the technological healthcare solutions being proposed.
Felipe De Los Santos is in his last year at Seton Hall University, School of Law. Felipe is set to graduate from Seton Hall in May 2013 with a Health Law Concentration. He graduated from Connecticut College in 2007 with a B.A. in English and Economics. From 2007-2009, he worked in finance as a Consultant for ALaS consulting between New York and Delaware. During his first year of law school Felipe interned with the New York State Majority Leader (2009-10).
Presently Felipe works as a Project Manager for a New York State health care company in the Community Based Programs division. Felipe manages and develops projects that focus on chronically ill elderly patients in New York City. As part of his responsibilities Felipe develops marketing strategies and action plans to support targeted patient populations who can benefit from managed long-term care. Currently, Felipe is involved in launching a Medicare/Medicaid Advantage Plan. Felipe’s work with vulnerable patient populations and interests in technology, have made the crossroad of technology and healthcare an interest that he has written about in law school. Felipe’s health reform interests include improving health care access and outcomes for vulnerable patient populations.
Felipe may be reached at email@example.com
A few years ago, I noted that the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC) has a dominant role in suggesting payment levels to CMS. It raises hard questions about price-setting in the health care sector, many of which cannot be answered because its processes are opaque. Now we know that judicial relief will not improve things any time soon. As Brian Klepper reports , “On January 7, a federal appeals court rejected six Georgia primary care physicians’ (PCPs) challenge to the Centers for Medicare and Medicaid Services’ (CMS) 20-year, sole-source relationship with the secretive, specialist-dominated federal advisory committee that determines the relative value of medical services.” What was the complaint?
This is a sad example of opacity in health pricing . In ordinary markets, publicity would tend to narrow the price differential between similar quality services. In health care, however, there is a triple layer of agency between care and patients whose physicians’ recommendations are often constrained by an insurer that is chosen by the patient’s employer or government. Even if we assume away the agency problems in such an arrangement, it is difficult for buyers and sellers to truly understand “market” dynamics, or even the governmental processes that underlie them.
Originally posted at Health LawProf Blog .
We live longer now but I don’t know that we live demonstrably better. Perhaps as a testament to my devotion, I bought tickets and brought my girlfriend to see John Denver w/band at the Best Buy theater in Manhattan. She’s a fan; I could not be described as such. The band was live, John Denver decidedly not– he having died in a plane crash back in 1997. But a video screen brought Mr. Denver back for the evening, and the band played wonderfully along in the foreground as video John Denver talked and sang– never once coming close to a dissonant note while looking and sounding like something that could only be described as the long lost innocence of a culture past.
Maybe his act was nothing but hokhum even back then, the unabashed optimism of his Country Roads, Sunny Shoulders and Rocky Mountain Highs just something we wanted to believe about ourselves: unbridled, essentially good and not particularly complicated. But in the 70s and into the 80s until his death, John Denver sold millions of records, hosted the Grammys five times, and an annual Christmas show on television which is said to have been viewed by over 60 million people; today he would be laughed away in a maelstrom of derision.
Maybe this is just the plaint of someone whose beard has gone gray and has answered one too many emails during dinner; maybe there is nothing essentially different in this lament than what I heard as a kid when old people pined for Glenn Miller and Benny Goodman: lost youth. But it seems like something more was lost in these last few decades. Face to face with John Denver’s stark exuberance, profoundly, I was driven to tears.
And yes, I sang along.
I’m not quite ready to give up a life in the law and what I learned from Voltaire, but will note that there appears to be a correlation between cynicism , pessimism and adverse health– and a good case is made for an inverse correlation between cynicism and success. Maybe take a minute or two and click and have a listen– think about it as a moment’s analog vacation from the drivers of modernity, from data mining dossiers, writ of attainder drones and thousand page statutes. Or, for the more adventurous, an evening with the posthumous Mr. Denver is still available – but be careful, if you’re of a certain age you may find yourself , inexplicably, crying over something you hadn’t even realized you lost.
Although the madness and overt preparedness that accompanies most major storms is enough to keep most American families safe until the power returns and the roads are cleared, the ferocity of natural disasters in recent years has deprived many of the ability to reach healthcare services, as well as subjecting others to new or unforeseen health risks. As was evident in last year’s atrocious Hurricane Irene, the dangers of large scale weather events are far reaching and effect both those who are or will be in need of medical care, as well as the systems of healthcare providing and insurance.
This year’s most recent disaster, Hurricane Sandy has been no different, with at least fourteen states effected, and the death toll reaching twenty four in New York alone. Boasting wind speeds above eighty miles an hour, and widespread flooding, millions of households across the American East have been put at risk. As citizens may require heightened healthcare needs due to the specific dangers of the storm, many individuals may face obstacles to appropriate health care, as well exposure to new dangers which may require access to health care.
With millions cut off from society due to fallen trees, flooded streets, and the dangers of fallen power lines, many individuals simply cannot travel to the nearest health care provider in a convenient manner. Due to mass telephone unavailability and overused cellular systems, many other citizens could not even signal for help in the event that they needed emergency assistance. Geographical bars to healthcare services are possibly the most expected and normal dangers that this natural disaster posed to the healthcare system. Claims of differing and unforeseen health risks have also been reported from many different areas effected by the storm, ranging from the typical flooding and structural collapses to more unusual dangers.
For example, in New York City, the “Positive Pest Management Corp” as well as other members of the scientific community have voiced concern over the viability of two less evident threats: rodents and raw sewage. While it is estimated that a large number of rats which dwell below the water level may have drowned, there have been reports of increased rat sightings as well as warnings that the large number of rats out on the street can exacerbate the risks posed by disease. Sources have also hypothesized that the flooded landscape may provide much more food for the newly surfaced rats that usually habitate in the underbellies of now-flooded urban areas; this may necessitate heightened pest-control needs in order to promote general health.
Although the rising tides may, allegedly, dilute the disease pathogens associated with rats and other disease-bearing creatures, as reported by the Huffington Post, researcher Joan Rose, the chairman of water research at the University of Michigan, was reported as saying that there is almost always an uptick in illness after a major flooding event due to the spreading of pathogens in flooded sewage waters– most notably E. Coli. This could be cause for concern in some of the more flood-afflicted portions of New York, New Jersey, and the greater eastern seaboard.
Regardless of exposure to sewage, flood waters in general may pose considerable risks to the public. For example, health officials in Atlantic City, New Jersey, are advising residents to not use water unless it is boiled. Dr. Rick Hong, an emergency medicine specialist at Cooper University Hospital asserted, “To be on the safe side, make sure you boil water first, right after an event, so you don’t get sick from the bacteria, the parasites that might be in the contaminated water.” This type of danger has pushed many residents to bottled water, as the safety of their tap water appears to be in question.
Although the everyday citizen faces increased health care difficulties created by Hurricane Sandy, the health care system as a whole is also significantly strained and damaged by the costly hurricane. For example, in its most immediate form, the hurricane itself bars emergency and health care services from running at efficient levels due to power outages, flooding, and the unreliability of phone services. As healthcare providers must struggle to meet the needs of the public, providers and insurers alike must bear the heightened cost of mitigating the health-related damage from the hurricane.
On top of the costs of meeting health needs, Sandy has also lead to the cancellation of more than 300 American Red Cross blood drives across fourteen afflicted states. These cancellations stopped approximately nine thousand lost units of blood and blood plasma from reaching those patients who are in need. This situation is exacerbated by the fact that hospitals and emergency health facilities could face heightened workloads due to Sandy before the noticeable dip in the blood supply.
Aside from risks to the everyday citizen, Hurricane Sandy also poses significant risks to the health care system at large– and will have significant economic and healthcare availability consequences in time. Hopefully, future natural disaster damages can be prevented given the knowledge gathered during this particular event.
1) “storm barrels through region, leaving destructive path.” James Barron
2) “rats add health concerns to list of new york’s problems.” Liz Kilmas. TheBlaze.com
3) “hurricane sandy hinders blood and platelet donations.” American Red Cross. PortageLife.com
4) “health: drinking water safety after hurricane sandy.” Stephanie Stahl. CBS.com/Philladelphia
This post originally appeared on the Health and Law Blog .
In a recent edition of the New England Journal of Medicine, Richard Frank discusse d recent efforts on the part of federal and state governments to enroll so-called “dual eligibles,” that is, individuals who qualify for both Medicare and Medicaid, into health plans that use “a strong care-management system under a unified budget.” Many believe that such plans have the potential to both save the government money and provide better coordinated, higher quality health care. (I discussed the need to better coordinate care for dually-eligible people here .) Individual beneficiaries are not necessarily convinced, however. Frank reports that it has been “very difficult to lure” them into “state-designed care coordination entities.” Beneficiaries may be hesitant to leave their fee-for-service doctors and other providers; they may also be afraid of the incentive to restrict services that a capitated global payment creates.
To get beneficiaries to make the switch from fee-for-service to coordinated care, states are taking a page from Nudge and making enrollment in a coordinated care plan automatic. The burden is then placed on the beneficiary to opt out if he or she so chooses. The use of “passive enrollment” will no doubt “work” to increase the rolls of coordinated care plans, but Frank wants states to aim higher, to strive to “promote self-determination for vulnerable populations and offer them a reason to engage with a new care delivery system with coordinated-care arrangements[.]”
As Frank explains, “[c]oordinated care for dually eligible people is built on a financial structure known as shared savings, in which three of the parties involved –- the federal government and state governments and the [coordinated care plan] –- share any financial gains from coordinating care.” Frank proposes that beneficiaries, too, be given a share of the expected savings– a share that they would be permitted to use to pay for “supplemental services and supports such as transportation, home modifications, and personal assistance with activities of daily living.” The prospect of (limited) control over a share of the expected savings would serve as an incentive to beneficiaries to engage in care coordination, while also “promot[ing] self-determination and the exercise of real options.”
Frank’s very appealing idea brought to mind the proposal Christopher Robertson makes in The Split Benefit: The Painless Way to put Skin Back in the Healthcare Game , which is forthcoming in the Cornell Law Review. While Frank would give beneficiaries an incentive to opt in to coordinated care, Robertson would give them an incentive to opt out of inefficient, high-cost care. Specifically, Robertson proposes that when a physician “prescribes a high-cost treatment that the insurer reasonably believes is inefficient[,]” the insurer would “[p]ay a small but substantial part of the insurance benefit”-what he terms the “split benefit”-in cash directly to the patient beneficiary. Then, “[i]f the patient chooses to proceed with the treatment, the patient takes the cash payment to the provider (along with any required cost share obligation), and the insurer matches it with the balance of the insurance benefit[.]” Patients who choose not to proceed with treatment, however, could spend the cash differently, on a “treatment that is not covered by the insurer (whether it is acupuncture, an alternative diet regimen, a concierge doctor, or visiting nursing services), paying money to a member of the family to stay home and provide care to the dying patient, or purchasing disability insurance to help cope with the symptoms of the illness.” They could even use the money to pay for non-health-related expenses. As Robertson explains, the split benefit would save insurers (and, down the line, purchasers of insurance) money by giving beneficiaries a financial incentive to turn down high-cost, low-value treatments. In Robertson’s words, the patient autonomy movement has been “cramped” by the fact that patients have been offered only “a walled garden of medical choices.” His split benefit, by contrast, “embraces a value-pluralism, respecting the patient’s weighing of medical and non-medical values.”
I highly recommend both Frank’s and Robertson’s pieces to anyone who-like me-is interested in ways to give patients a piece of the action when it comes to the multiplicity of current efforts to coordinate and rationalize their care.
As I mentioned here last month, government leaders are turning their attention to mental health issues focusing on diagnosis and access to treatment, in particular in the wake of the horrific shootings at Sandy Hook Elementary School in Newtown, Connecticut in December. Even though it remains unclear whether or not the shooter suffered from any form of mental disorder, many leaders have argued that expanding treatment access for those suffering from mental disorders will prevent future tragedies.
As President Obama pledges to define the new mental health essential benefits under the Affordable Care Act (“ACA”), state leadership is also beginning to react. Perhaps somewhat surprisingly, South Carolina Governor Nikki Haley (R) the leader of the state that had cut mental health funding by nearly 40 percent from 2009 to 2012 (mentioned here ) is now leading the call to increase funding and services for those diagnosed with mental illness.
In addition to her proposal to increase funding for mental health services by $16 million in the summer of 2012, Haley has now called for an additional $11.3 million in funding for the South Carolina Department of Mental Health (“SCDMH”); in fact, her total proposed budget for the SCDMH in the 2013 budget is $17 million . Haley has been particularly outspoken on the issue, noting that “[t]here is nothing wrong with someone who has a mental health issue…. There is something very wrong when that person doesn’t get treatment…. These are good productive citizens that deserve to live good, healthy life [sic]. And if given treatment they can be incredibly successful. If not given treatment, we as a state have failed.”
She has argued that increasing funding for mental health treatment can prevent another tragedy like the one seen at Newtown. Treating an increase in mental health funding as an alternative to implementing additional gun control or gun safety measures, Haley mentioned that “[n]o amount of gun control can stop someone from getting a gun when they want to get it. What we can do is control mental health in a way that we treat people.”
Undoubtedly, the increase in funding is an abrupt policy change from South Carolina’s recent history. From 2008 to 2012, the state was cutting funding to the South Carolina Department of Mental Health by an average of $70 million per year .
Ironically, however, Governor Haley is speaking during the exact same time that all states are deciding whether or not to expand their Medicaid programs under the ACA which would affect many individuals’ access to mental health services. Just earlier this week , Ohio Governor John Kasich (R) agreed to expand his state’s Medicaid program, while Pennsylvania Governor Tom Corbett (R) has decided to opt-out of the expansion. Corbett’s refusal made Pennsylvania the eleventh state to decline to expand its Medicaid program. And who else is staunchly opposed to expanding her state’s Medicaid program?
South Carolina Governor Nikki Haley.
This past summer, Governor Haley announced “ via Facebook that South Carolina ‘will NOT expand Medicaid, or participate in any health exchanges ’” (emphasis in original). According to the Health Affairs Blog , South Carolina’s refusal to expand its Medicaid program would prevent more than 500,000 South Carolinians from being granted healthcare coverage. In other words, if Haley had decided to expand her state’s Medicaid enrollment pursuant to the ACA, South Carolina’s Medicaid enrollment would increase from about 951,000 currently (which is nearly one in every five South Carolinians) to nearly 1.5 million in FY 2014.
Governor Haley’s recent positions create a situation in which the state is increasing funding for mental health service offerings in the state, but is refusing to expand coverage ( paid for in whole by the federal government for three years ) to many individuals who currently lack access to the services. Needless to say, positions taken on health policy issues cannot be examined in isolation.
Indeed, according to the Congressional Budget Office, if all states agreed to opt-in to the Medicaid expansion under the ACA, 13 million more Americans would have their mental health treatments covered by Medicaid. However, given the policy positions like those of Governor Haley, this unfortunately remains highly unlikely. Treatment offerings can increase, but if individuals do not have insurance coverage to pay for those services, access and receipt of those services is likely to remain largely elusive.
Being involved in the immigrant community as a member and a professional, my concerns in any legal field almost instinctively gravitate towards how my fellow immigrants would be affected. Thus, when examining the regulatory changes to health law under the Patient Protection and Affordable Care Act (PPACA), I was disappointed to discover that the large pool of undocumented immigrants living in the United States will continue to receive absolutely nothing, regardless of the impact that this might have on them, U.S. citizens and Legal Permanent Residents.
The most important changes in the United States health care system under PPACA are probably the requirements for all individuals to have medical insurance and the expansion for eligibility for government-funded health insurance under Medicaid which will include people from any age range so long as they meet certain financial criteria. However, none of the changes apply to undocumented immigrants. As noted by the Congressional Research Service,
PPACA mandates that all individuals maintain “minimum essential” health insurance (public or private) or else pay a “shared responsibility payment” to the government in the form of additional taxes at the end of the year. The individual health insurance requirement is a smart move because it will have the effect of injecting financial resources into the health care system through payments to private and public insurances. However, the exemption of over 10 million undocumented immigrants currently living in the U.S. from the individual health insurance requirement under PPACA is disadvantageous because it wastes resources that are readily available to further fund the health care system. Specifically, the exemption is wasteful because statistics show that the undocumented immigrant community includes a large number of healthy individuals who would provide more financial support for the system, while not exacting more in health care costs than they have paid in.
Under Medicaid, an individual is eligible if he or she is a U.S. citizen or a legal permanent resident for at least 5 years; no changes to these criteria were made through PPACA. And, again, undocumented aliens are forbidden from taking part in the Health Insurance Exchange and thereby whatever discounts one might expect from this competitive marketplace. Thus, the desirable benefit of having health insurance will remain unattainable for undocumented immigrants who are unable to afford the costly expenses of having non-discounted and un-subsidized private insurance. So for the large undocumented immigrant population there will be no change with regard to their accessibility to the health care system, and the only available coverage will continue to be through the Emergency Medical Treatment and Active Labor Act (EMTALA) and any available local government health benefits that might be offered in each state.
Having EMTALA as one of the few viable options for medical treatment for all uninsured individuals, regardless of their immigration status, is harmful to the financial stability of the health care system because the type of treatment that must be made available under EMTALA is for emergency medical conditions. Inherently, the costs for treating an emergency condition, which is defined as a condition that could reasonably be expected to place the health of the individual in serious jeopardy or cause serious impairments to bodily functions, is much higher than providing care for preventive medical treatment before the emergency stage. Thus providing health care government assistance to undocumented immigrants for preventive treatment could save the government money in the long run.
The possibility of negative consequences to U.S. citizens when denying affordable medical care to undocumented immigrants should be contemplated when considering an extension of health coverage for minimal essential benefits to undocumented immigrants. For instance, it would be far less costly for the government to subsidize pre-natal treatment for undocumented mothers-to-be (who will, by virtue of their being here, give birth to American citizens) than to assume the costs for the lifetime of a U.S. citizen who is born with permanent disabilities. Similarly it would be less costly for the government to provide enough medical insurance coverage for an individual to be checked for HIV/AIDS rather than assume the costly treatment to U.S. citizens that could have acquired HIV/AIDS from an immigrant that did not know that he or she was carrying the disease.
Because providing undocumented immigrants some type of health benefit or greater access to health insurance would be more beneficial to the country in numerous ways, the U.S. government should consider putting to use all the financial and human power potential that the undocumented immigrant community offers rather than casting them out as less than worthy human beings.
Noemi Simbron is a native of Peru and a current law student at Seton Hall University School of Law. Her interest in immigration law stems from her current work as a law clerk at a well known immigration law firm in Newark, N.J., and her own background. She hopes to one day represent her fellow immigrants in a variety of legal fields– including immigration.
Health experts and non-experts alike agree that the U.S. healthcare system is in need of significant reforms. Yearly increases in health insurance premiums are particularly vexing. To relieve some of the pressure, President Barack Obama promised significant reforms when he signed the Affordable Care Act (“ACA”) into law –- arguably the biggest healthcare overhaul in U.S. healthcare history since the passage of Medicare and Medicaid in 1965.
One of the key additions to the ACA is section 2718 of the Public Health Service Act, which requires health insurance issuers offering individual or group coverage to submit annual reports to the Secretary of Health and Human Services on the percentages of premiums that the issuer spends on reimbursement for clinical services and activities that improve healthcare quality and to provide rebates to enrollees when the issuers fail to meet the given year’s minimum requirements.
Under the direction of section 2718, the National Association of Insurance Commissioners (“NAIC”) developed uniform definitions and standardized calculating methodologies, which the HSS fully adopted, for requiring issuers to spend at least 80-85% of their premiums on actual medical care, with the remaining 15-20% going towards administrative costs, marketing, and other non-health care-related expenses. The NAIC defined these activities as the Medical Loss Ratio (“MLR”), also known as the 80/20 rule.
In response to consumer advocates’ concerns the final rule implementing the MLR standards, was revised to establish a mandatory onetime simple MLR informational notice requirement for issuers in the group and individual markets that meet or exceed the applicable MLR standard. The purpose of the notice was to inform the current subscribers of the new regulation. These onetime MLR informational notices are different from MLR rebate notices, which have to be send every time the issuer fails to comply with the 80-85% requirement The final MLR regulation entered finally into effect on June 15, 2012.
This new MLR rule reflects the ACA’s main goal to ensure that “hardworking, middle class families […] get the security they deserve” and that every American is protected from the “worst insurance company abuses.” Essentially, the MLR is intended to help ensure that all of us receive value for our premium dollars by requiring health insurance companies to spend at least 80-85% on healthcare and activities that improve the quality of healthcare (“QIA”). However, if the issuers spend less than the required minimum of 80-85%, they will have to return the portion of the premium revenue in excess of the limit as a rebate.
The new amendment requires all issuers, independent of whether they complied with the 80-85% MLR rule to notify their subscribers of this new regulation, which is an important step towards reinforcing consumer protection. However, as I argue in this post even the improved notice rule falls somewhat short of addressing all of the consumer advocates’ concerns.
In the global scheme of the current MLR regulation, consumer advocates are satisfied with the added notice requirements. However, they demand that the Department of Human Health and Services (“HHS”) strengthens the notice requirement, removes ambiguities and takes a step further by requiring health insurance companies to disclose how much they have spent on healthcare and quality of care in their current and previous year.
Consumer advocates believe that these improvements will increase health plan transparency, reduce consumer confusion, and ensure that all consumers receive information about how their premiums are spend. However, there is some criticism from health insurance companies about the added notice requirement. They claim that, in addition to the added cost of preparing and sending out notices, providing consumers with more information will only lead to more confusion as to how the 80-85% MLR is calculated. They reason that because the MLR has many value enhancing services that, according to the issuers, are not captured by the MLR formula, but nevertheless benefit all of us, we as consumers will draw mistaken inferences about insurer’s spending. Essentially, keeping us in the dark about how insurance companies spend OUR premium dollars, as was the case in the past, will only benefit us – along the lines “I know what’s best for you, so the less you the know/care the happier you’ll be.”
In an attempt to meet the demands of consumer and health insurance advocacy groups, the HHS adopted a balanced approach seeking to minimize the cost of additional notice requirement to the issuers while protecting the interests of consumers. Essentially, the HHS determined that while failing to require MLR information notices from issuers would result in reduced transparency, any greater notice requirements, like those demanded by the consumer advocates, would impose a greater burden on the issuers than is necessary. As such, the HHS decided to merely impose a simple onetime notice that only provides standard limited information about the MLR rule. However, the HHS misses the mark.
First, the MLR notices are intended to simply inform consumers of the existence of the new law. The fact that they were required to be sent only this year, raises the question of whether the notices will reach every subscriber as intended. Also, even assuming that they do reach every subscriber, the problem with the onetime notice is that all future subscribers will be out of luck and thus remain ignorant. However, Issuers that owe rebates will still be required to send out rebate notifications. There is an interesting notion in the regulation where the HHS explicitly “allows” issuers to voluntarily send out MLR notices. But, relying on issuers’ willingness to volunteer additional disclosure is not only impractical, but can be counterproductive because sending out random notices will only increase confusion and irritation among consumers. The ongoing annual MLR notices, on the other hand, will establish a ubiquitous presence, which is essential in creation of new expectations among consumers. Knowing where and how the premiums are spend, will likely reduce consumers’ resentment and disappointment with the relentless annual health insurance cost increases.
Second, the general information about the MLR rule and the actual MLR percentages is available on the HHS website and must be referenced in the MLR informational notices. Thus, the issuers’ fear that providing such detailed MLR information to the consumers in the notices will be too burdensome and counterproductive, is unjustified. Rather, by requiring the issuers to provide more information in the actual MLR notices, the HHS would only ease consumers’ access to such information and enable consumers to evaluate their issuer’s performance on the spot. Likewise, issuers contention that consumers might misinterpret the MLR information because the MLR formula is too complex and contains value enhancing services that according to the issuers, are not captured in the MLR formula, is unpersuasive because the NAIC and the HHS have already determined that MLR is a reliable measure of issuers’ performance in terms of their healthcare and quality of care versus administrative spending. Accordingly, the HHS should require issuers to include more information about the MLR in general, and demand that issuers’ provide their current and past year’s MLRs.
Finally, issuers argue vehemently that the mandatory notice requirement is too costly and imposes a great burden on the issuers. There appears little support for that. The HHS has already determined that the benefits to consumers will outweigh the administrative costs incurred by insurers through the issuance of notices to the policyholders. In particular, according to the HHS estimates, the total administrative cost for preparing and mailing notices to issuers that meet or exceed the MLR target would merely amount to approximately three million dollars, an average cost of $9,000 to 10,000 per issuer for the 2011 reporting year, translating to an average added cost of $0.16 per enrollee for preparing and sending a notice by mail, including labor and supply costs. Importantly, the estimates are for the first time notices only. By requiring frequent annual notices, the cost of such notices can be reduced even further as the notices become more automated. This only supports the recommendation that the HHS should require annual notices.
With these important amendments to the final rule the HHS can expect to achieve greater transparency and more accountability regarding how the issuers use their premium revenue, which is the main purpose of the ACA.
The HHS has promulgated an important consumer empowering regulation, but there is still a lot of work to be done. Consumers deserve to know how their premium dollars are spent and demand that the bulk of their premium dollars is primarily spent on health care. The MLR rules help move us toward that goal.
Ina Ilin-Schneider is a fourth year part-time student at Seton Hall University School of Law. She graduated summa cum laude from Hunter College in 2008 with a B.A. in Psychology and a minor in Economics. While an undergraduate, Ina worked as a teaching assistant in the “Statistical Methods in Psychology” class and as a research intern at the Memorial Sloan-Kettering Cancer Center performing analysis on prevalence of alcohol abuse in the gay community. During her second year of law school, Ina served as a Judicial Intern to the Magistrate Judge, the Honorable Mark Falk, providing assistance in legal research and drafting memoranda on legal questions. Ina intends to practice compliance law after she graduates in May of 2013.